Stocks were mostly flat yesterday after the Fed decision to leave interest rates alone. The S&P 500 reached 7000 for the first time, but didn't hang and closed below it. After hours Magnificent 7 earnings were mixed setting up an interesting interpretation today. Yields and the dollar rallied, putting pressure on the S, F, and I-funds.
After hours yesterday Magnificent 7 companies Microsoft was sharply lower after reporting earnings, while Meta and Tesla were positive. IBM, not a Mag 7 stocks, was also rallying. Microsoft is the largest of the bunch and it may have the biggest impact on the indices, but it was the lone loser and Meta was trading up 10%.
I had the Meta earnings release date wrong. I had seen February 2. You can't always trust what AI tells you.
It looks like Meta may try to fill in the open gap created after their prior earnings report.
The Fed left interest rates at 3.50% - 3.75%, and as we often say, the Fed is usually allowing the bond market, in particular the 2-year Treasury Yield, to show them where the Fed Funds Rate is going. The 2-year is currently 3.58%. If we want to know what they are going to do at the March meeting, keep an eye on this chart.
The 10-year Yield did continue its rebound off the top of the bull flag that it broke out of several days ago. That is typical technical action, and it suggests yields may be going higher. It hasn't been a major issue so far this year, but could higher yields put a damper on the S-fund's recent out performance over large caps?
The dollar finally found support after a big rebound off of Tuesday's lows. It didn't quite fill in the open gap from September, but the longer term chart below does show why it may have stopped going down for now.
Back to the stock market: Once again the big three indices were up or flat, but internally we saw more weakness than the indices suggested. It could be temporary, but it is something to keep an eye on.
The S&P 500 (C-fund) made a new intraday all time high and hit 7000 for the first time ever, but it just missed closing at a new high. So it temporarily broke above resistance, but the top of the trading channel is also looming overhead as more possible resistance.
We will get Apple earnings after the closing bell today, and the PPI wholesale prices report on Friday.
Additional TSP Fund Charts:
The DWCPF (S-fund) continues to flirt with a couple of support levels. One is the old resistance line of the inverted head and shoulder pattern, and one is the rising support line off the previous lows. The 50-day average near 2554, and the open gap near 2525 are looming below, beckoning the index to do some backing and filling. If this can hold here, it would tough not to get bullish because there would likely be a big move higher coming if it can successfully negotiate all of that. But yesterday's negative outside reversal day is a concern.
ACWX (I fund) was down modestly yesterday, but it actually held up pretty well considering the 0.60% gain in the dollar. It's just one day off its all time highs, and within a strong, albeit narrow, trading channel.
The rally in the UUP dollar chart hit resistance already at the 200-day simple moving average, but there are open gaps above that could keep the relief rally going in the dollar.
BND (bonds / F-fund) was down but it closed well off the lows of the day. It is now sitting in the middle of that blue trading channel, and looking for direction, although the trend is still positive.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
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Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
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After hours yesterday Magnificent 7 companies Microsoft was sharply lower after reporting earnings, while Meta and Tesla were positive. IBM, not a Mag 7 stocks, was also rallying. Microsoft is the largest of the bunch and it may have the biggest impact on the indices, but it was the lone loser and Meta was trading up 10%.
I had the Meta earnings release date wrong. I had seen February 2. You can't always trust what AI tells you.
It looks like Meta may try to fill in the open gap created after their prior earnings report.The Fed left interest rates at 3.50% - 3.75%, and as we often say, the Fed is usually allowing the bond market, in particular the 2-year Treasury Yield, to show them where the Fed Funds Rate is going. The 2-year is currently 3.58%. If we want to know what they are going to do at the March meeting, keep an eye on this chart.
The 10-year Yield did continue its rebound off the top of the bull flag that it broke out of several days ago. That is typical technical action, and it suggests yields may be going higher. It hasn't been a major issue so far this year, but could higher yields put a damper on the S-fund's recent out performance over large caps?
The dollar finally found support after a big rebound off of Tuesday's lows. It didn't quite fill in the open gap from September, but the longer term chart below does show why it may have stopped going down for now.
Back to the stock market: Once again the big three indices were up or flat, but internally we saw more weakness than the indices suggested. It could be temporary, but it is something to keep an eye on.
The S&P 500 (C-fund) made a new intraday all time high and hit 7000 for the first time ever, but it just missed closing at a new high. So it temporarily broke above resistance, but the top of the trading channel is also looming overhead as more possible resistance.
We will get Apple earnings after the closing bell today, and the PPI wholesale prices report on Friday.
Additional TSP Fund Charts:
The DWCPF (S-fund) continues to flirt with a couple of support levels. One is the old resistance line of the inverted head and shoulder pattern, and one is the rising support line off the previous lows. The 50-day average near 2554, and the open gap near 2525 are looming below, beckoning the index to do some backing and filling. If this can hold here, it would tough not to get bullish because there would likely be a big move higher coming if it can successfully negotiate all of that. But yesterday's negative outside reversal day is a concern.
ACWX (I fund) was down modestly yesterday, but it actually held up pretty well considering the 0.60% gain in the dollar. It's just one day off its all time highs, and within a strong, albeit narrow, trading channel.
The rally in the UUP dollar chart hit resistance already at the 200-day simple moving average, but there are open gaps above that could keep the relief rally going in the dollar.
BND (bonds / F-fund) was down but it closed well off the lows of the day. It is now sitting in the middle of that blue trading channel, and looking for direction, although the trend is still positive.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
